Impairment risk from an acquired subsidiary’s failure to meet its business plan
First written in FY2020. 3 of 6 entries say "Mitigated", first in FY2021. Latest entry: FY2026.
CHANGE Holdings moved to the "Worse" side of this theme in 2024, 3 years after the typical company in this theme (2021).
The whole theme swung hardest in 2026: 17 of 32 companies on the "Worse" side.
11 other companies' latest entry also says "Mitigated".
- FY2026MitigatedAnnual report
「The impairment loss for the current consolidated fiscal year mainly reflected a reduction in the carrying amount of software to its recoverable amount due to declining profitability.」
The impairment loss declined from ¥798 million in the previous fiscal year to ¥55 million in the current fiscal year, and the company states that the recoverable amount of its principal goodwill exceeds its carrying amount. However, the possibility of impairment resulting from changes in key assumptions remains. - FY2025MaterialisedAnnual report
「The main impairment losses recognized in the current consolidated fiscal year related to assets whose profitability declined due to changes in business strategy and other factors. As a result of impairment tests, the recoverable amounts fell below the carrying amounts, and impairment losses were recognized.」
Impairment risks relating to the business plans and profitability of acquired subsidiaries and other entities materialized in the current fiscal year, primarily as ¥798 million in impairment losses on intangible assets and other assets. - FY2024MaterialisedAnnual report
「As a result of an impairment test based on the latest business plan for goodwill arising on the acquisition of DFA Robotics Co., Ltd., the recoverable amount fell below the carrying amount, and the company recognized an impairment loss of ¥1,956 million.」
The impairment risk arising from failure to achieve the business plan of an acquired subsidiary and other factors has materialized as a ¥1,956 million impairment loss on DFA Robotics’ goodwill. - FY2023MitigatedAnnual report
「In the current consolidated fiscal year, the recoverable amount exceeds the carrying amount of the cash-generating unit or group of cash-generating units. However, if there are significant changes in key assumptions such as sales volume and selling prices, the recoverable amount may fall below the carrying amount.」
The company conducted an impairment test on goodwill relating to acquired subsidiaries and states that significant impairment losses are unlikely, with DFA Robotics’ recoverable amount exceeding its carrying amount by ¥1,564 million, among other factors. - FY2021MitigatedAnnual report
「In the previous consolidated fiscal year and the current consolidated fiscal year, the recoverable amount substantially exceeded the carrying amount of the cash-generating unit or group of cash-generating units. Even if the discount rate used to calculate the recoverable amount were to fluctuate within a reasonable range, we have determined that significant impairment losses are unlikely because the recoverable amount substantially exceeds the carrying amount of the cash-generating unit.」
The company conducted impairment tests on goodwill relating to acquired subsidiaries and other entities, and states that the recoverable amount substantially exceeded the carrying amount, making significant impairment losses unlikely. - FY2020First statedAnnual report
「If we recognize an impairment loss due to failure to achieve the business plans of subsidiaries and other companies acquired by our group, market concerns over creditworthiness, an increase in discount rates caused by a sharp rise in interest rates, or other factors, this may affect our group’s performance. To address these impairment risks, we focus on discussions by the Board of Directors and the Executive Committee regarding the appropriateness of acquisition prices, as well as PMI (post-merger integration) aimed at achieving business plans after acquisitions.」
The company newly identifies impairment risks arising from failure to achieve the plans of acquired subsidiaries and other factors, with consideration of acquisition prices and post-acquisition PMI as countermeasures.